EXHIBIT C
ESCROW AGREEMENT
ESCROW AGREEMENT
ESCROW AGREEMENT (the "Agreement") dated January 17, 2003 by and among
ADVANCED PHOTONIX, INC., a Delaware corporation (hereinafter referred to as the
"Purchaser") with its principal offices at 0000 Xxxxxxx Xxxxx, Xxxxxxxxx,
Xxxxxxxxxx 00000, the STOCKHOLDERS who are signatories hereto (hereinafter
collectively referred to as the "Sellers") of TEXAS OPTOELECTRONICS, INC., a
Texas corporation (hereinafter referred to as "Company") with its principal
offices located at 000 Xxxxxxxx Xxxxx, Xxxxxxx Xxxxx 00000, and AMERICAN ESCROW
COMPANY, solely in its capacity as escrow agent (the "Escrow Agent"). The
Purchaser and Sellers are sometimes referred to herein as the "Interested
Parties."
The Purchaser and the Sellers have entered into a Stock Purchase
Agreement of even date herewith (the "Purchase Agreement").
This Agreement is entered into pursuant to the terms of the Purchase
Agreement. The Sellers have made, given or received certain agreements,
covenants, representations and warranties and indemnities in the Purchase
Agreement and have agreed that a portion of the purchase price shall be placed
and maintained in an escrow account to be administered pursuant to this
Agreement and the Purchase Agreement. Capitalized terms not otherwise defined in
this Agreement shall have the meanings ascribed to them in the Purchase
Agreement.
The parties hereto desire to arrange for such escrow and appoint the
Escrow Agent as escrow agent in accordance with the terms hereof.
A copy of the Purchase Agreement has been delivered to the Escrow Agent
and the Escrow Agent is willing to act as Escrow Agent hereunder. The Escrow
Agent is willing to hold and administer any income thereon and additions
thereto, and to pay and distribute the amounts held by it in accordance with the
agreement of the Interested Parties and/or judicial orders and decrees as set
forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained in this Agreement and the Purchase Agreement and intending to be
legally bound, the parties hereto do hereby agree as follows:
1. APPOINTMENT OF ESCROW AGENT. Escrow Agent is hereby
appointed to act as escrow agent in accordance with the terms hereof, and the
Escrow Agent hereby accepts such appointment. Escrow Agent shall have all the
rights, powers, duties and obligations provided herein.
2. THE ESCROW FUND. On the date hereof, the Sellers have
delivered or caused to be delivered to the Escrow Agent (i) stock certificates
registered in the name of the Escrow Agent representing the Seller's beneficial
ownership of an aggregate of 250,000 shares of the Purchaser's Common Stock, par
value $.001 per share (such shares together with all share distributions
received by the Escrow Agent pursuant to Section 2.1 collectively, the "Shares")
and (ii) the sum of Fifty Thousand ($50,000) Dollars by certified check or by
wire transfer of immediately available funds
(such amount together with any income earned thereon and any cash distributions
received by the Escrow Agent with respect to the Shares, collectively, the
"Cash""). The Shares and the Cash Escrow together are sometimes referred to
herein as the "Collateral" or the "Escrow Fund". The Escrow Agent hereby
acknowledges receipt of the Escrow Fund, and agrees to hold and administer the
same subject to and in accordance with the terms of this Agreement.
2.1 The Shares.
(a) Sellers hereby authorize The Purchaser to
deliver directly to the Escrow Agent (and agree that they will deliver to the
Escrow Agent if they shall first receive same) to be held as part of the
Collateral hereunder, all dividends and other distributions, whether in cash or
other property, made on or with respect to any Shares held in escrow hereunder.
(b) While any of the Shares are held in escrow
hereunder, the Sellers will have all rights thereto, except (a) the right of
possession and (b) the right to receive any dividends or other distributions
thereon. Without limiting the generality of the foregoing, the Escrow Agent will
vote the Shares held by it as Collateral hereunder in accordance with written
instructions received by the Escrow Agent from the Sellers beneficially
interested therein, determined in accordance with Section 2.1.(c) hereof, and in
default of such instructions may vote or omit to vote such Shares in its
discretion. Proxy soliciting material received by the Escrow Agent as the record
holder of Shares held as Collateral will be forwarded promptly to the Sellers.
(c) The beneficial interest of each Seller in
the Share Collateral held by the Escrow Agent hereunder is as follows:
Percentage of Share No. of
Name of Seller Collateral Delivered
-------------- ---------- ---------
Xxxxx, Mayborn Co., Ltd. 40.66% 101,650
Xxxxx, Mayborn Co., Ltd. 37.24% 93,100
Xxxxx X. Xxxxx 4.6% 11,500
Xxx Xxxxxx 15.0% 37,500
Xxxxxx X. Major, Jr. 1.7% 4,250
Xxxx Xxxx 0.8% 2,000
2.2 The Cash.
(a) The Escrow Agent shall invest and
reinvest any cash which may from time to time be held in the Escrow Fund at the
written direction of the Interested Parties, in (i) marketable direct
obligations having a term not in excess of 90 days issued or unconditionally
guaranteed by the United States government and backed by the full faith and
credit of the United States; (ii) marketable direct obligations issued by any
state of the United States or any political subdivision of any such state or any
public instrumentality thereof, having the first or second highest rating
obtainable from either Standard & Poor's Corporation ("S&P") or Xxxxx'x
Investors Service,
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Inc. ("Moody's") having a term not in excess of 90 days; (iii) commercial paper
having, at the time of acquisition, a rating of A-1 or P-1 or better from either
S&P or Moody's; (iv) certificates of deposit having a term not in excess of 90
days issued by any commercial bank organized under the laws of the United States
of America or any state thereof or the District of Columbia having combined
capital and surplus of not less than $100,000,000, provided that if such
commercial bank is not organized under the laws of the United States of America,
it must be a member of the Federal Deposit Insurance Corporation, or (v) any
money market mutual fund substantially all of which is invested in the foregoing
investment categories; (vi) time deposits, demand deposits or money market funds
registered under the Investment Seller Act of 1940, as amended from time to time
(the "1990 Act"), the portfolios of which are limited to Government Securities
(as defined in the 1940 Act); or (vii) such other investments as may be
expressly approved in writing by both the Purchaser and the Sellers. Escrow
Agent shall (to the extent permitted by the terms of the applicable investment)
sell or redeem any such investment as necessary to make any payments required
pursuant to this Agreement and shall not be responsible for any losses or
penalties incurred as a result of any such sale or redemption. In the absence of
written directions from the Interested Parties, the Escrow Agent shall invest
any cash which may from time to time be held in the Escrow Fund in a money
market fund of Bank of America (the "Depository Institution"). The Escrow Agent
shall not be responsible or liable for any loss accruing from any investment
made in accordance herewith. All earnings received from the investment of the
Escrow Funds shall be credited to, and shall become a part of, the Escrow Fund
(and any losses on such investments shall be debited to the Escrow Fund). The
Escrow Agent shall have no liability for any investment losses, including any
losses on any investment required to be liquidated prior to maturity in order to
make a payment required hereunder.
(b) The Sellers or entities making payment on
behalf of the Sellers listed below (each a "Depositor") shall have an interest
in the Cash Collateral held by the Escrow Agent hereunder is as follows:
Amount Percentage
Name of Depositor of Cash Collateral Interest
----------------- ------------------ --------
Xxxxx, Mayborn Co., Ltd. $47,189 94.4%
Xxxxx X. Xxxxx $ 2,811 5.6%
3. CLAIMS OF PURCHASER AGAINST ESCROW FUND.
3.1 Not later than sixty (60) days after the date hereof,
the Purchaser may assert a claim against the Escrow Fund based upon adjustment
of the purchase price pursuant to Section 2.2 of the Purchase Agreement by
giving written notice to the Escrow Agent and the Sellers of the fact that it is
asserting such a claim. Such claim shall be resolved pursuant to the provisions
of Section 2.2 of the Purchase Agreement, and no amount so claimed shall be
distributed to the Purchaser or the Sellers until such resolution has been
completed and the Escrow Agent is instructed in writing as to the disposition of
the amount of such claim by the Interested Parties or by final order of a court
of competent jurisdiction.
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3.2 Not later than the first anniversary of the date
hereof, the Purchaser may assert a claim for indemnification pursuant to Section
8.2 of the Purchase Agreement (an "Indemnification Claim"), by sending written
notice to the Escrow Agent and to the Sellers (a "Notice of Claim"). The Notice
of Claim shall state the basis for the Indemnification Claim and the total
amount claimed (the "Claim Amount") and show in reasonable detail how such
amount was computed. If any of the Sellers objects to all or any part of the
Indemnification Claim (a "Disputed Claim"), he shall give written notice of such
objection to the Escrow Agent and to Purchaser within 30 days after receipt of
such Notice of Claim by the Escrow Agent (a "Dispute Notice"). If such Dispute
Notice is not received by the Escrow Agent within thirty (30) days of the Escrow
Agent's receipt of a Notice of Claim, the Sellers shall be deemed to have
acknowledged the correctness and validity of the Indemnification Claim, and the
Escrow Agent shall pay to Purchaser out of the Escrow Fund the lesser of (i) the
full Claim Amount (or in the event only part of the Indemnification Claim is in
dispute, the amount which is undisputed), or, if less, (ii) the entire amount
remaining in the Escrow Fund. Such payment shall be made by the transfer of
Shares to the Purchaser having a value equal to the Claim. For purposes of
determining the number of Shares required to satisfy any Claim Amount, the
Shares shall be valued as provided in the second sentence of Section 4.2 below.
Any such payment in Shares shall be made by transferring Shares on a pro-rata
basis from each account of the Sellers listed in Paragraph 2.1(c).
3.3 In the event that any of the Sellers shall dispute an
Indemnification Claim, then the Escrow Agent shall retain so much of the Escrow
Fund as may be sufficient to pay said Disputed Claim in full and shall make no
distribution thereof unless and until the Escrow Agent receives joint written
instructions from the Interested Parties or a final order or decree of a court
of competent jurisdiction. Upon the mutual written direction of the parties or
upon receipt of such court order or decree, the Escrow Agent shall disburse the
Escrow Fund in accordance with such written directions or court order.
4. RELEASE OF THE ESCROW FUND.
4.1 Sixty (60) days after the date hereof (the "Initial
Release Date"), the Escrow Agent shall pay to the Depositor out of the Escrow
Fund an amount equal to their percentage interest, as set forth in Section
2.2(b) above, of Fifty Thousand ($50,000) Dollars, plus any interest earned
thereon, less any amounts claimed by, or paid to, Purchaser pursuant to Section
3.1 above. Any amount held in the Escrow Fund pursuant to the preceding sentence
on account of a claim by Purchaser which is ultimately determined not to be
payable to Purchaser, shall be paid to the Sellers promptly after such
determination is made.
4.2 On the first anniversary of the date hereof (the
"Final Release Date"), the Escrow Agent shall deliver the Shares remaining in
the Escrow Fund, duly endorsed for transfer in blank, to the Sellers in
proportion to the percentages set forth in Section 2.1(c) less the number of
Shares representing the value of any unresolved Indemnification Claims. For
purposes of the preceding sentence, the value of the Shares shall be determined
on the basis of average closing price of the Purchaser's Class A Common Stock on
the American Stock Exchange (or such other nationally
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recognized exchange or automated quotation system as the parties may reasonably
agree upon) over the ten (10) business days immediately preceding the date of
the Escrow Agent's receipt of the relevant Indemnification Claim.
5. TERMINATION OF ESCROW. The escrow provided for hereunder
shall terminate upon the date on which no Collateral is held by the Escrow
Agent.
6. ESCROW AGENT.
6.1 Escrow Agent hereby accepts its appointment and
agrees to act as Escrow Agent under the terms and conditions of this Agreement.
6.2 Escrow Agent is not a party to, or bound by any
agreement which may be deposited under, evidenced by, or which arises out of the
foregoing instructions.
6.3 Escrow Agent acts hereunder as a depository only and
is not responsible or liable in any manner whatever for the sufficiency,
correctness, genuineness, or validity of any instrument deposited with it
hereunder, or with respect to the form or execution of the same, or the
identity, authority, or rights of any person executing or depositing the same.
6.4 Escrow Agent shall not be required to take or be
bound by notice of any default of any person, or to take any action with respect
to such default involving any expense or liability, unless notice in writing is
given to an officer of Escrow Agent of such default and unless it is indemnified
in a manner satisfactory to it against any such expense or liability. These
instructions shall not be subject to rescission or modification except upon
receipt by Escrow Agent of written instructions of all the parties hereto or
their successors in interest, and no such modification shall be effective unless
and until consented to in writing by Escrow Agent.
6.5 Escrow Agent shall be protected in acting upon any
notice, request, waiver, consent, receipt, or other paper or document believed
by Escrow Agent to be genuine and to be signed by the proper party or parties.
6.6 Escrow Agent shall not be liable for any error of
judgment or for any act done or step taken or omitted by it in good faith, or
for any mistake of fact or law, or for anything which it may do or refrain from
doing in connection herewith, except its own willful misconduct, and Escrow
Agent shall have no duties to anyone except those signing these instructions.
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6.7 Escrow Agent may consult with legal counsel in the
event of any dispute or questions as to the construction of the foregoing
instructions, or Escrow Agent's duties hereunder, and Escrow Agent shall incur
no liability and shall be fully protected in acting in accordance with the
opinion and instructions of such counsel.
6.8 Escrow Agent assumes no liability and the parties
hereto consent and agree that Escrow Agent shall have no liability for any
defalcation, insolvency, receivership or conservatorship of the Depository
Institution.
6.9 Nor shall Escrow Agent have any liability due to any
of the parties other than Escrow Agent filing for Bankruptcy or the consequences
or effect of such a Bankruptcy on the funds and/or documents deposited
hereunder.
6.10 For its ordinary services hereunder, Escrow Agent
shall be entitled to an initial fee of $500.00, payable concurrently with its
acceptance hereof.
6.11 The parties hereto further agree that Escrow Agent
assumes no liability for and is expressly released from any claim or claims
whatsoever in connection with the receiving, retaining and delivering of the
above papers and funds except to account for payment and/or delivery made
thereon. Deposit by Escrow Agent of the instruments and funds (less its charges
and expenses incurred herein) comprising this escrow in Court, shall relieve
Escrow Agent of all further responsibility and liability, and following any such
deposit, Escrow Agent is hereby expressly authorized to disregard in its sole
discretion any and all notices or warnings given by any of the parties hereto,
or by any other person or corporation, but the said Escrow Agent is hereby
expressly authorized to regard and to comply with and obey any and all Orders,
Judgments or Decrees entered or issued by any Court with or without
jurisdiction, and in case Escrow Agent obeys or complies with any such Order,
Judgment or Decree of any Court it shall not be liable to any of the parties
hereto or to any other person, firm or corporation by reason of such compliance,
notwithstanding any such Order, Judgment or Decree be entered without
jurisdiction or be subsequently reversed, modified, annulled, set aside or
vacated. In case of any suit or proceeding regarding this escrow to which Escrow
Agent is or may be at any time a party, it shall have a lien on the contents
hereof for any and all cost, attorneys' fees, whether such attorneys shall be
regularly retained or specially employed and other expenses which it may have
incurred or become liable for on account thereof, and it shall be entitled to
reimburse itself therefor out of said deposit, and the undersigned jointly and
severally agree to indemnify and hold harmless Escrow Agent from all loss, costs
or damages incurred, including but not limited to attorneys' fees, by reason of
this Agreement or the subject matter hereof or any cause of action which may be
filed in connection therewith and to pay Escrow Agent, upon demand all such
costs, fees and expenses so incurred.
6.12 In the event that Escrow Agent performs any service
not specifically provided hereinabove, or that there is any assignment or
attachment of any interest in the subject matter of this escrow or any
modification thereof, or that any controversy arises hereunder, or that Escrow
Agent
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is made a party to, or intervenes in, any litigation pertaining to this escrow
or the subject matter hereof, Escrow Agent shall be reasonably compensated
therefor and reimbursed for all costs and expenses occasioned thereby; and the
parties hereto agree jointly and severally to pay the same and to indemnify
Escrow Agent against any loss, liability, or expense incurred in any act or
thing done by it hereunder, it being understood and agreed that Escrow Agent may
interplead the subject matter of this escrow into any court of competent
jurisdiction in Dallas County, Texas, and the act of such interpleader shall
immediately relieve Escrow Agent of its duties, liabilities, and
responsibilities hereunder.
6.13 The Escrow Agent (or any successor) may at any time
during the term hereof resign its position hereunder by giving 30 days' prior
written notice of its intention to resign to the Purchaser and the Sellers. Such
resignation shall be effective upon the appointment of a successor escrow agent
reasonably acceptable to the Purchaser and the Sellers who shall have agreed to
serve in accordance with the terms hereof. Escrow Agent may be removed by the
joint action of the Purchaser and the Sellers, with or without cause, at any
time upon 60 days' prior written notice to Escrow Agent, which notice may be
waived by Escrow Agent. Notwithstanding any resignation or removal of Escrow
Agent pursuant to this Section 6.13, Escrow Agent shall continue to serve in its
capacity as escrow agent until (i) a successor escrow agent is appointed and has
accepted such appointment and (ii) the Escrow Fund has been transferred to and
received by such successor escrow agent. Purchaser and Sellers shall promptly
take the necessary action to appoint a successor escrow agent in accordance with
Section 6.14 below. Except as provided in Section 2.1 (b) above with respect to
the voting of the Shares, for all purposes of this Agreement, the act of Sellers
holding a majority of the beneficial interests in the Shares shall be deemed to
be the act of the Sellers.
6.14 If at any time Escrow Agent shall resign, be removed
or otherwise become incapable of acting as escrow agent pursuant to this
Agreement, or if at any time a vacancy shall occur in the office of Escrow Agent
for any other cause, a successor escrow agent shall be appointed by the Sellers,
with the written consent of the Purchasers, which consent may not be
unreasonably withheld, by a written instrument delivered to the successor escrow
agent. If no successor escrow agent has been appointed at the effective date of
resignation or removal of Escrow Agent or within 30 days after the time Escrow
Agent became incapable of acting or a vacancy occurred in the office of escrow
agent, any party hereto may petition a court of competent jurisdiction for an
appointment of a successor escrow agent and Escrow Agent shall have the right to
refuse to make any payments from the Escrow Fund until a successor escrow agent
is appointed and has accepted such appointment. Upon the appointment and
acceptance of any successor escrow agent hereunder, Escrow Agent shall transfer
the Escrow Fund to its successor. Upon receipt by the successor escrow agent of
the Escrow Fund, Escrow Agent shall be discharged from any continuing duties or
obligations under this Agreement, but such discharge shall not relieve Escrow
Agent from any liability incurred prior to such event, and the successor escrow
agent shall be vested with all rights, powers, duties and obligations of Escrow
Agent under this Agreement.
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7. TAXES
7.1 Tax Reporting. The Interested Parties agree that, for
tax reporting purposes, all interest or other income earned from the investment
of the Escrow Funds in any tax year shall (i) to the extent such interest or
other income is distributed by the Escrow Agent to any person or entity pursuant
to the terms of this Agreement during such tax year, be allocated to such person
or entity, and (ii) otherwise shall be allocated to the Sellers.
7.2 Certification of Taxpayer Identification Number. The
Interested Parties hereto agree to provide the Escrow Agent with a certified tax
identification number by signing and, returning a Form W9 (or Form W-8, in case
of non-U.S. persons) to the Escrow Agent prior to the date on which any income
earned on the investment of the Escrow Funds is credited to the Escrow Funds.
The Interested Parties understand that, in the event their tax identification
numbers are not certified to the Escrow Agent, the Internal Revenue Code, as
amended from time to time, may require withholding of a portion of any interest
or other income earned on the investment of the Escrow Funds.
7.3 Tax Indemnification. Each of the Interested Parties
agree, jointly and severally, to assume any and all, obligations imposed now or
hereafter by any applicable tax law with respect to any payment or distribution
of the Escrow Funds or performance of other activities under this Agreement, to
instruct the Escrow Agent in writing with respect to the Escrow Agent's
responsibility for withholding and other taxes, assessments or other
governmental charges, and to instruct the Escrow Agent with respect to any
certifications and governmental reporting that may be required under any laws or
regulations that may be applicable in connection with its acting as Escrow Agent
under this Agreement, and to indemnify and hold the Escrow Agent harmless from
any liability or obligation on account of taxes, assessments, additions for late
payment, interest, penalties, expenses and other governmental charges that may
be assessed or asserted against the Escrow Agent in connection with or relating
to any payment made or other activities performed under the terms of this
Agreement, including without limitation any liability for the withholding or
deduction of (or the failure to withhold or deduct) the same, and any liability
for future to obtain proper certifications or to report properly to governmental
authorities in connection with this Agreement, including costs and expenses
(including reasonable legal fees and expenses) interest and penalties. The
foregoing indemnification and agreement to hold harmless shall survive the
termination of this Agreement.
8. (a) NOTICES. All notices, demands or other communications
to be given or delivered under or by reason of the provisions of this Agreement
shall be delivered personally, sent by facsimile transmission or sent by
certified, registered or express mail, postage prepaid. Any such notice will be
deemed given when so personally delivered or sent by facsimile transmission or,
if mailed, two days after the date of deposit in the mails. All such notices
shall be addressed as follows:
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If to the Sellers:
Xxxxx X. and Xxxxxx X. Xxxxx
0000 Xxxxxxx Xxxx - Xxxxx 000
Xxxxxx, Xxxxx 00000
Fax: (000) 000-0000
Xxxxx, Mayborn Co., Ltd.
0000 Xxxxxxx Xxxx - Xxxxx 000
Xxxxxx, Xxxxx 00000
Fax: (000) 000-0000
Don and Xxxxx Xxxxxx
Xx. 0 Xxx 000
Xx. Xxxxxx, Xxxxx 00000
Fax: (000) 000-0000
Xxxxxx X. Major, Jr. and Xxxxx Major
X.X. Xxx 000000
Xxxxxxxx XX 00000
Xxxx Xxxx
0000 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
With copies to:
Xxxxxx and Xxxxx, LLP
0000 X. Xxxxx Xxxx
Xxxxx 0000
Xxxxxxxxxx, XX 00000
Attn: Xxxxx Xxxx, Esq.
Fax: (000) 000-0000
If to the Purchaser:
Advanced Photonix, Inc.
0000 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: President
Fax: (000) 000-0000
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With copies to:
Xxxxxxx X. Xxxxx
Quantum Compliance Systems
0000 Xxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Fax: (000) 000-0000
-xxx-
Xxxxxxxx Xxxxxx Xxxxxxxxxx & Xxxxxxxxx, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx Xxxxxxxx, Esq.
Fax: (000) 000-0000
9. WIRING INSTRUCTIONS. Any funds to be paid to or by the Escrow
Agent hereunder shall be sent by wire transfer pursuant to the following
instructions (or by such method of payment and pursuant to such instruction as
may have been given in advance and in writing to or by the Escrow Agent, as the
case may be, in accordance with Sections 1, 4 and 5 above).
If to the Purchaser:
Bank: Santa Xxxxxxx Bank & Trust
0000 Xxxxx Xxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
ABA #: 000000000
A/C #: 37006574
Ref: Advanced Photonix, Inc.
If to the Xxxxx, Mayborn Co., Ltd.:
Bank: Chase Bank of Texas - Houston
ABA #: 000000000
FAO: Southwest Securities
A/C#: 08805076955
FFC: 155556710 (Xxxxx, Mayborn Co., Ltd.)
Attn: Xxx Xxxxxxxx
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If to Xxxxx X. Xxxxx:
Bank: Chase Bank of Texas-Houston
ABA #: 000000000
FAO: Southwest Securities
A/C#: 08805076955
FFC: 155587733 (Xxxxx X. Xxxxx, Xx.)
Attn: Xxx Xxxxxxxx
If to the Escrow Agent:
Bank: Bank of America
ABA#: 000000000
FAO: AMERICAN ESCROW COMPANY
Acct #: 1297633886
Re: 03S01338 CR6
Attn: Xxxxxxx Xxxxxxxx (000) 000-0000
10. BINDING EFFECT; THIRD PARTIES. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective heirs,
executors, administrators, representatives, successors and assigns. This
Agreement is not intended to confer any rights or remedies hereunder on any
other person other than the parties hereto.
11. AMENDMENTS. This Agreement may be amended or modified at any
time or from time to time in a writing executed by the Sellers, the Purchaser
and the Escrow Agent. No supplement, modification or amendment of this Agreement
shall be binding unless executed in writing by each of the parties. No waiver of
any of the provisions of this Agreement shall be deemed to constitute a waiver
of any other provision hereof, whether or not similar, nor shall any waiver
constitute a continuing waiver. No waiver shall be binding unless executed in
writing by the party making the waiver.
12. GOVERNING LAW. This Agreement will be governed by, and
construed in accordance with the laws of the State of Texas, without resort to
the choice of law provisions of the laws of the State of Texas or any other
state. The parties hereby irrevocably submit to the exclusive jurisdiction of
any state court sitting in the City of Dallas, Texas or the federal court whose
venue includes such city over any action or proceeding arising out of or
relating to this Agreement, and hereby irrevocably agree that all claims in
respect of such action or proceeding may be heard and determined in such state
or federal court. The parties hereby irrevocably waive, to the fullest extent
permitted by law, any objection they or either of them may now or hereafter have
to the venue of any such action or proceeding in any such court as well as any
right they or either of them may now or hereafter have, to remove any such
action or proceeding, once commenced, to another court on the grounds of forum
non convenient or otherwise. The parties agree that a final non-appealable
judgment in any such
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action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
13. DISPUTE RESOLUTION. It is understood and agreed that should
any dispute arise with respect to the delivery, ownership, right of possession,
and/or disposition of the Escrow Fund, or should any claim be made upon the
Escrow Agent or the Escrow Fund by a third party, the Escrow Agent upon receipt
of notice of such dispute or claim is authorized and shall be entitled (at its
sole option and election) to retain in its possession without, liability to
anyone, all or any of said Fund until such dispute shall have been settled
either by the mutual written agreement of the parties involved or by a final
order, decree or judgment of a court in the United States of America, the time
for perfection of an appeal of such order, decree or judgment having expired.
The Escrow Agent may, but shall be under no duty whatsoever to, institute or
defend any legal proceedings which relate to the Escrow Fund.
14. FORCE MAJEURE. The Escrow Agent shall not be responsible for
delays or failures in performance resulting from acts beyond its control. Such
acts shall include but not be limited to acts of God, strikes, lockouts, riots,
acts of war or terrorism, epidemics, governmental regulations superimposed after
the fact, fire, communication line failures, computer viruses, power failures,
earthquakes or other disasters.
15. REPRODUCTION OF DOCUMENTS. This Agreement and all documents
relating thereto, including, without limitation, (i) consents, waivers and
modifications which may hereafter be executed, and (ii) certificates and other
information previously or hereafter furnished, may be reproduced by any
photographic, photostatic, microfilm, optical disk, micro-card, miniature
photographic or other similar process. The parties agree that any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding, whether or not the original is in
existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
16. COUNTERPARTS. This Escrow Agreement may be executed in
several counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
17. INTEGRATION. This Agreement and the Purchase Agreement
constitute the entire agreement and understanding of the parties with respect to
the subject matter of this Agreement and supersede all prior agreements and
understandings with respect thereto.
18. SEVERABILITY. If any provision of this Agreement is held
invalid by any court, governmental agency or regulatory body, the other
provisions shall remain in full force and effect.
19. HEADINGS. The descriptive headings used throughout this
Agreement are for convenience only and do not constitute a part of this
Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first written above.
SELLERS
/s/ Xxxxx X. Xxxxx
--------------------------------
Xxxxx X. Xxxxx
13
/s/ Xxxxx X. Xxxxx
--------------------------------
Xxxxx X. Xxxxx
14
/s/ Xxx Xxxxxx
--------------------------------
Xxx Xxxxxx
15
/s/ Xxxxx Xxxxxx
--------------------------------
Xxxxx Xxxxxx
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/s/ Xxxxxx Major
--------------------------------
Xxxxxx Major
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/s/ Xxxxx Major
--------------------------------
Xxxxx Major
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/s/ Xxxx Xxxx
--------------------------------
Xxxx Xxxx
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XXXXX, MAYBORN CO., LTD.,
a Texas limited partnership
By: /s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx, Managing General Partner
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ADVANCED PHOTONIX, INC., PURCHASER
By: /s/ Xxxxxxx Xxxxx
----------------------------------------
Xxxxxxx Xxxxx, Chairman
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Escrow Agent hereby acknowledges receipt of this Agreement and of the Cash
referred to herein, agrees to accept the Shares referred to herein to be
delivered to Escrow Agent within five business days of this Agreement, and
agrees in consideration of the foregoing to hold and dispose of the same in
accordance with said instructions and upon the terms and conditions above set
forth.
AMERICAN ESCROW COMPANY, Escrow Agent
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------
Xxxxx X. Xxxxxxxx, Vice President
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